ICT and e-Business in the Pulp, Paper and Paper ... - empirica

Pulp, paper and paper products
4.2 ICT as a Driver of Process Efficiency
4.2.1 Introduction
Improving the efficiency of production and supply chain processes is an important
objective for all manufacturing businesses. However, the potential depends on the
structure and characteristics of supply chain processes. This section explores the impact
of ICT on business processes of companies from the P&P industry and assesses where
the major potential sources for innovation and productivity improvements are located.
The assessment and conclusions are based on desk research, case studies (all case
studies featured in this report, not only those contained in this section), interviews with
business representatives and data from the e-Business Survey 2006. A significant
challenge for this industry is how to draw valid general conclusions: the sub-sectors
have different characteristics and therefore potentially different drivers leading to
differences in their major e-business activities (e.g. technology for paper manufacturing
vs. technology for paper converting). Furthermore, main conclusions are presumably
different for small and large firms. To the extent possible within the scope of this report,
these functional and structural differences are taken into account. However, some
generalisations (for "the industry"), are proposed where applicable.
Companies from the P&P industry, depending on the segment and size of operations,
have chosen different approaches to building their supply chain, linking to suppliers from
forestry and the chemical industries (upstream) and to customers, e.g. in the food and
beverages industry (downstream). ICT service providers talk about the "total forest supply
chain" in this context. 77 Supply chain integration via connecting ERP systems (or similar
standard software packages) is the most common approach which medium-sized and
larger companies in the sector use to manage their operations.
4.2.2 Substitution of paper-based processes
An important focus of e-business activities in the P&P industry is intended to increase the
supply chain efficiency by eliminating paper-based processes as much as possible in all
stages of B2B trade, thus optimising the flow of information and documents in and
between companies. ERP systems are currently the main platform to enable this goal. 78
The critical role of ERP systems
The use of ERP systems is widespread among companies from the P&P industry,
compared to most other sectors studied by e-Business W@tch in 2006 (see also Section
3.4.1). In total, companies representing 45% of employment said they operated an ERP
system; the ICT manufacturing industry is the only one among the 10 sectors studied with
an even higher adoption rate. In general, ERP systems are mostly used by manufacturing
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See, for example, TietoEnator, a service provider catering to the pulp, paper, board and tissue
industries (www.tietoenator.com > industry expertise areas, April 2006).
Note that ERP (Enterprise Resource Planning) software has a broader functionality for
companies than just to eliminate paper-based processes. This section focuses on specific
aspects only.
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